Analysts Are Updating Their The Tata Power Company Limited (NSE:TATAPOWER) Estimates After Its Full-Year Results

Last week, you might have seen that The Tata Power Company Limited (NSE:TATAPOWER) released its yearly result to the market. The early response was not positive, with shares down 8.8% to ₹415 in the past week. Results overall were respectable, with statutory earnings of ₹11.56 per share roughly in line with what the analysts had forecast. Revenues of ₹633b came in 3.1% ahead of analyst predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tata Power after the latest results.

Check out our latest analysis for Tata Power

Taking into account the latest results, the current consensus from Tata Power's 17 analysts is for revenues of ₹699.0b in 2025. This would reflect a notable 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 21% to ₹13.98. In the lead-up to this report, the analysts had been modelling revenues of ₹684.1b and earnings per share (EPS) of ₹13.27 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹358, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Tata Power at ₹490 per share, while the most bearish prices it at ₹240. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Tata Power's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% annually. Factoring in the forecast slowdown in growth, it looks like Tata Power is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tata Power's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Tata Power will grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Tata Power. Long-term earnings power is much more important than next year's profits. We have forecasts for Tata Power going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Tata Power has 2 warning signs (and 1 which is concerning) we think you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.